Press Release 2015
New Radio Spectrum Auction to Eliminate Federal Debt
WASHINGTON, DC, April 1, 2015/PN Newswire/ - The Federal Communications Commission announces new plans to auction additional radio spectrum to raise federal general funds that will be used to reduce the federal deficit. In agreements with both political party caucuses, the vast quantities of spectrum are to be auctioned by the end of 2016. This is in addition to the previously announced incentive auction below 700 MHz.
In light of the $41.3 billion in net proceeds from the AWS-3 spectrum auction, concluded in January, the prospect of making a substantial reduction in the federal debt is possible, said FCC chair, Buck Bigwheel.
The recent radio spectrum auction of 65 MHz of the AWS-3 spectrum band raised over $63 million dollars per MHz nationwide. “At these prices, we see that the 300 GHz of spectrum under the FCC’s current authority can be valued at $ 19 trillion dollars, which is more than the current accumulated Federal debt,” said FCC Chairman Bigwheel.
Of course not all of this spectrum is available for mobile operators to use today; RADAR, broadcast radio, television, short wave, satellite communications, point to point links and many other uses must be respected. Consequently, the FCC plans to auction currently unused spectrum taken from the imaginary frequency axis. Unlike spectrum from the real axis, spectrum on the imaginary axis is currently vastly underutilized. Commissioner Ajay W. Twopi points out, “the value of this new spectrum increases exponentially, unlike spectrum on the real axis which fluctuates with the wireless business.”
An analysis conducted by the GOP congressional caucus warns that this is a complex field and that, analytically, the continuation of this agreement into the next administration depends upon the values of derivatives.
Several FCC commissioners point out that an organization known as Daesh participated in the previous auction under multiple names, disrupting the auction and diverting revenue to itself through the use of 25% bidding credits. Even among many of its peers, Daesh is regarded as a dangerous group that is attempting to take over large areas of the wireless business. The FCC stated that it controls the Air Interface and will use that power to support the opponents of Daesh.
In late breaking news today, the Democratic congressional caucus has agreed with the FCC to authorize the auctioning of the electromagnetic spectrum from 400 to 480 THz as early as 2016. This would restrict use of this newly regulated band to license holders before the next presidential election. In related news, the Republican caucus has announced their intention to auction the 631 to 666 THz spectrum under similar terms. At current prices this 115 THz of spectrum should raise over 73000 trillion dollars[1], over 4000 times the cumulated federal debt, which should be raised from privatizing the red and blue parts of the visible spectrum.
Though there is some doubt that the capital markets would be able to raise the needed funds in time for a 2016 auction; the value of these particularly attractive spectrum bands should justify the investment. Critics have noted that, if red and blue are privatized, they would need to be removed from the US flag, but the flag may be grandfathered in or revised simply as gold and white.[2] Proponents have countered that removal of both red and blue from the US congress would lead to a more effective legislature. The auction is currently planned for April Fools’ Day 2016.
About Spectrum Financial Partners, (www.spectrumfinancialPartners.com)
Spectrum Financial Partners, LLC is a private equity fund investing in radio spectrum and partnering with spectrum licensees, and wireless operators. We provide consultations and valuation services to interested parties. Discounted comedic services are offered annually on April Fools’ Day. Media Contact: Stephen Wilkus at Stephen.WIlkus@SpectrumFinancialPartners.com
[1] Given that the 65 MHz of AWS-3 spectrum just sold for a net $41.3 billion; 115 THz x $41.3 billion /65 MHz equals 73000 trillion or 73.07 quadrillion US dollars. The current cumulative US Federal debit is 18.14 trillion US dollars.
[2] See the dress controversy described at: http://tinyurl.com/p6hzq6k and http://en.wikipedia.org/wiki/The_dress_(viral_phenomenon)
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